Investing.com - The euro strengthened against the dollar on Monday after a key U.S. Federal Reserve official said rate hikes could come later than markets may be expecting.
In U.S. trading, EUR/USD was up 0.44% at 1.2682, up from a session low of 1.2621 and off a high of 1.2697.
The pair was likely to find support at 1.2604, Friday's low, and resistance at 1.2792, Thursday's high.
The dollar has firmed against the euro and most other currencies in recent sessions on expectations for U.S. monetary policy to diverge with Europe and Asia.
While the U.S. is seen closing its monthly bond-buying programs this month and hiking interest rates in 2015, expectations that the Federal Reserve may take its time when tightening policy next year began to build on Monday in wake of dovish comments out of the U.S. central bank.
"If foreign growth is weaker than anticipated, the consequences for the U.S. economy could lead the Fed to remove accommodation more slowly than otherwise," Federal Reserve Vice Chair Stanley Fischer said in prepared remarks of a speech he delivered at the annual International Monetary Fund/World Bank meeting over the weekend.
Bottom fishers also gave the single currency an edge over the dollar, though gains were seen as limited on concerns the European economy faces building headwinds, which may require fresh stimulus measures from the European Central Bank.
Last week, data revealed that Germany exports fell 5.8% in August.
Elsewhere, the euro was up against the pound, with EUR/GBP up 0.47% at 0.7894, and up against the yen, with EUR/JPY up 0.27% at 136.13.
On Tuesday, the ZEW Institute is to release its closely watched report on German economic sentiment, a leading indicator of economic health.
The euro zone is to publish data on industrial production.